Following its latest round of departures and continued erratic performance at the stock market, Zynga's future prospects have been looking increasingly bleak. Critics and industry analysts actually began counting the number of high-profile employees and executives left at the San Francisco-based social game developer, leading many to wonder how exactly the company hoped to recover from its current financial dilemma. On Thursday, the company finally offered up some details when it confirmed that it has hired a former online gambling executive to lead its real-money gambling venture.
Zynga has expressed interest in real-money gambling for a long time, an initiative it returned to in full force this past July once its share price took a nose-dive. Scrambling for a solution, executives promised investors and the general public that the company would focus on gambling and mobile gaming in an effort to move away from the unreliable revenue streams it had been relying on from its Facebook games.
Reports had surfaced throughout the end of the summer about Zynga's concrete plans to expand its gambling operations as reports began to surface about the social game developer funding gambling lobbying organizations and approaching online gambling figures as it started to hemorrhage top executive talent.
The gambling site Social Casino Intelligence first reported that Zynga had hired Maytal Ginzburg Olsha as its Chief Operator Officer of new markets at the end of August. In an interview with VentureBeat on Thursday, Zynga's Executive Vice President of business and corporate development confirmed the new hire, saying that Olsha is a "fantastic addition to Zynga."
"She joins our team with a deep understanding and direct experience in getting online gaming product offerings off the ground and directly into the hands of players," Cottle said. "She is a strong advocate for integrating social features into real money offerings in order to make them more appealing and interactive for casual audiences. Maytal's arrival is a win for Zynga and our player network."
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Thanks to recent legal developments, online gambling has become more ubiquitous and culturally accepted than ever before in the US. But it is still a far cry from the type of game development that many videogame studios do.
Yet, while many game developers look down on gambling as a seedy, artless counterpart to their work, Robert Jarvis, a law professor at Nova Southeastern University that studies gambling legislation, said that Zynga can only stand to benefit from the name recognition that classic forms of gambling offer.
"If you asked most people what Zynga is, or what FarmVille is," Jarvis said in a phone interview, "they wouldn't have a clue what you're talking about!" Poker and blackjack, on the other hand, are practically timeless.
Ginzburg said in a statement that she was "proud to have joined the team" at Zynga, saying that her new employer "is at the forefront of the next evolution of games and entertainment. The company has already built enthusiastic, engaged communities around free social casino games. And as we move down the path towards real money offerings we will be listening carefully to our players to align with the right potential partners and offer the best gaming experience possible."
Zynga plans to enter international real-money gambling in 2013, but interestingly the company already has established titles such as Zynga Poker, along with Zynga-fied versions of slots and bingo, available on its mobile and Facebook platforms. Zynga Poker is already the world's largest online poker community, and the opportunity to monetize such a robust user-base is no doubt enticing to a company whose stock refuses to budge from its position below $3 per share.
Jarvis added that shifting into gambling gives Zynga a leg up over other game developers and social media companies who must traffic in freemium content to attract a wide enough user base to support themselves with one key difference: gamblers already expect to spend many when gambling. And not only that, gamblers are willing to play the games daily, dropping hundreds of dollars in the process.
"Those numbers just don't exist in FarmVille," Jarvis said.
Ginzburg comes from the online gambling firm 888, where she served as senior vice president of corporate and unregulated markets. She first joined 888 as vice president of customer acquisition in 2007, and was later promoted to vice president of poker and corporate customer acquisition in 2009 and was appointed senior vice president of corporate and regulated markets earlier this year.
Share prices for Zynga rose above $3 late Wednesday afternoon, but fell back below the $3 mark shortly after and remained there during trading Thursday.